FEDERAL GOVERNMENT RELATIONS
Basel committee head urges adoption of new standards
Erik Thedéen, the new chair of the Basel Committee on Banking Supervision, is calling for the swift implementation of the latest Basel III standards. Speaking at the Institute of International Finance, Thedéen said the standards are important for global financial stability, warning against short-term policymaking that could weaken regulatory oversight. The U.S. has so far stalled its implementation, causing other regions to reconsider their commitments.
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CFPB issues final rule on open banking
The Consumer Financial Protection Bureau has rolled out its final rule on open banking under Section 1033 of the Dodd-Frank Act. The rule applies to the sharing of financial data on products such as credit cards, checking accounts, payment apps and mobile wallets, and it requires financial institutions to share customer data at customers' request without fees. Banks criticized the rule, saying it could jeopardize consumer data security and exceeded the agency's legal powers, while fintech groups praised it, saying it would promote the safe transfer of consumer data.
Financial industry pushes back on new CFPB rule
Consumer Financial Protection Bureau Director Rohit Chopra defended the agency's newly finalized open banking rule on Wednesday, saying opposition from financial institutions and trade groups is an attempt to maintain control over consumer data. The rule, mandated by Section 1033 of the Dodd-Frank Act, aims to give consumers more control over their financial data, but it has also raised concerns about data security.
Bank groups sue CFPB over open banking data sharing rule
The Bank Policy Institute, along with the Kentucky Bankers Association and Forcht Bank, has filed a lawsuit against the Consumer Financial Protection Bureau in response to its new open banking rule. The lawsuit claims that the CFPB exceeded its authority by mandating banks to share sensitive customer data with third parties, potentially compromising data security, and argues that the rule limits banks' ability to manage risks and could lead to increased cyber threats.
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Nineteenth credit union-bank deal sets new record
Y-12 Federal Credit Union in Tennessee has agreed to buy First State Bank of the Southeast in Kentucky, marking the 19th credit union-bank deal this year, a record. The transaction, expected to close in early 2025, will give Y-12 FCU its first presence in Kentucky.
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Crypto industry spends big backing Congressional candidates
Cryptocurrency firms and executives have poured $160 million into political campaigns aiming to influence the 2024 elections. The spending has been channeled through super PACs to support pro-crypto candidates and oppose critics, impacting both Democratic and Republican races and potentially leading to regulatory changes in favor of the industry.
Fed officials debate pace of interest-rate cuts
Four Federal Reserve policymakers said they support further rate cuts but diverge on the pace and extent of their reductions. Kansas City Fed President Jeffrey Schmid and Dallas Fed President Lorie Logan advocated for gradual cuts. Minneapolis Fed President Neel Kashkari also supports modest cuts but noted that a weakening labor market could prompt faster action. In contrast, San Francisco Fed President Mary Daly argued for continued rate reductions without a pause, emphasizing the need to maintain economic growth as inflation falls.
Home Loan bank governance overhaul proposed by FHFA
The Federal Housing Finance Agency has proposed significant revisions to the corporate governance of the Federal Home Loan banks. The proposal includes yearly evaluations of directors, performance-based compensation and mandatory background checks for board nominees. The changes are part of the FHFA's effort to align the banks' operations with their public mission while maintaining effective governance.